News Release

BCSC reaches settlements in illegal distribution cases

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Vancouver – The British Columbia Securities Commission (BCSC) has reached settlement agreements with three B.C. men and one man from Alberta who were involved in companies that were illegally selling shares.

Chung-Shen “Johnson” Kao, Gagan Deep Bachra, Chi Kay“Dixon” Wong and Meng Cher “Phillip” Tsai were nominee directors of three companies that raised a total of $19.6 million between 2016 and 2017:

  • FS Financial Services (Alberta) Inc., of which Kao was a director, raised $12.6 million from 72 investors in B.C. 
  • Verico FS Capital Inc., of which Bachra was a director, raised $5.38 million from 35 investors 
  • FS Financial Systems Inc., of which Wong and Tsai were directors, raised $1.62 million from 15 investors  

All of the money was raised without a prospectus, a formal document that explains the details of an investment and the risks involved. None of the investors qualified for an exemption from the prospectus requirements under the Securities Act.

Kao, an Alberta resident, admitted that by acting as a nominee director he engaged in conduct abusive to the capital market. The other three admitted to allowing an illegal distribution of securities.

As part of the settlement, Wong has agreed to pay $15,000, and Tsai and Bachra have agreed to each pay $7,500, to the BCSC. All four men are required to take a course on the duties and responsibilities of corporate officers and directors.

Wong, Bachra and Tsai are prohibited for two years and Kao is prohibited for one year from:

  • trading in or purchasing securities or exchange contracts (with some limited exceptions) 
  • relying on any exemption under the Securities Act
  • being a director or officer of any issuer or registrant 
  • being or acting as a registrant or promoter 
  • acting in a management or consultative capacity in connection with the securities market
  • and engaging in investor relations activities

None of the men have any history of securities misconduct and all of them invested their own funds into their respective companies.

About the British Columbia Securities Commission (  

The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:

  • A securities market that is fair and warrants public confidence
  • A dynamic and competitive securities industry that provides investment opportunities and access to capital

Media Contact:
Elise Palmer

Public inquiries:
604-899-6854 or 1-800-373-6393 (toll free)

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